Rowe denies $4 million custody deal

In this image made from video, Debbie Rowe is followed by members of the media as she exits a restaurant in Lancaster, Calif. on Sunday, July 5, 2009.

Debbie Rowe has hit back at reports she agreed to drop her bid for custody of her two children with Michael Jackson in exchange for a $4 million payoff, insisting she is continuing her bid for parental rights.

Jackson clan matriarch Katherine was made temporary guardian of Prince Michael, 12, Paris, 11, and Prince Michael II, aka Blanket, 7, after her superstar son died last month.

Rowe relinquished her rights to the two older children in 2001 after receiving an $8 million lump sum and an annual cash payment of $900,000 from the King of Pop.

The New York Post reported on Tuesday that Rowe had accepted a $4 million payment to back out of the custody battle, days before a hearing scheduled for July 20 was set in an effort reach an agreement over the kids’ future.

But Rowe has denied giving up her bid for Prince and Paris, with her lawyer Eric George demanding an “immediate retraction” from the newspaper.

In an open letter George writes, “There has been no agreement reached between Ms. Rowe and the Jacksons. Ms. Rowe has not and will not give up her parental rights. No determination has been reached concerning custody or visitation. And Ms. Rowe has not accepted and will not accept any additional financial consideration beyond the spousal support she and Michael personally agreed to several years ago.”